TheMReport

14 | TH E M R EP O RT M0NTH IN REVIEW FROM THE SOURCE Monthly Mashup We've distilled the month's most significant market trends impacting home sales, economic growth, and more. 1 Eye on Economic Growth The Commerce Department has released an estimate for economic growth in Q3 of 3.5 percent—a slight drop from 4.2 percent in Q2. Consumer spending, which accounts for nearly 70 percent of all U.S. economic output, rose 4 percent- age points, tracking with its strength in the preceding quarter. Inventory additions also boosted numbers by 2 percent. Housing, however, did little to help the numbers, shrinking 4 percentage points—its third consecu- tive decline. 2 Freddie Mac Earnings The government-sponsored enterprise (GSE), which completed 10 years under conservatorship this year, reported a comprehensive income of $2.6 billion driven primar- ily by "stable business revenues and strong credit quality" in Q3 2018. 3 Mortgage Rates Rising According to Urban Institute, 91 percent of mortgages as of September had average rates below 5 percent. By comparison, there were almost no mortgages with rates that low in 2001 and less than a quarter of U.S. mortgages had rates that low in 2010. However, real estate agents should urge their clients to buy now, as these low rates are expected to rise in the coming months. 4 A Joint Study A report published by Wells Fargo and Governing Institute reveals that 82 percent (of 2,000 citizens surveyed) saw home affordability as either a crisis or a serious challenge. 5 Hot Markets Despite Cold Weather The top five metros for buyers this winter, according to Zillow, are Orlando, Florida; Boston, Massachusetts; Seattle, Washington; Las Vegas, Nevada; and Charlotte, North Carolina. 6 Homeownership Is a Wealth- Building Tool An Urban Institute study found that having a homeowning parent increases a young adult's likeli- hood of being a homeowner by 7 to 8 percent. In addition, for every additional 1 percent of parents' wealth, the chances of their children owning a home themselves ticks up as much as two-tenths of a percent. Young adults are more likely to be homeowners if their parents' wealth is above $200,000. 7 A Look at Loan Defects According to the First American Loan Application Defect Index, the frequency of defects, fraudulence, and misrepresentation in mortgage loan applications rose 1.3 percent in September 2018 compared with August 2018. 8 Impact on Credit LendingTree found that on aver- age, credit scores fell by 15 points over a nearly five-month period following a mortgage, and it took an average of another five months to return to prior levels. 9 Putting that 20 Percent Down Saving for a 20 percent down payment on a home took 5.5 years two decades ago. Since then, home values have increased at twice the pace as incomes. Today, for a person earning a median income and saving 10 percent each month, it would take a little more than seven years to save for a down payment, according to a study by Zillow. 10 Jump in Home Prices Nationally, the median price for existing single-family homes rose 4.8 percent in Q3 2018, up to $266,900 year-over-year, from Q3 2017's median price of $254,700, ac- cording to the National Association of Realtors. SHARE THIS: CHASE DREAM BOARDS HomeEquity.Chase.com/RenovationBoard An interactive web experience brought to you by Chase Home Lending, in partnership with Pinterest and TV personalities Drew and Jonathan Scott, Chase Dream Boards helps inspire consumers in their home renova- tions. Just fill out an online questionnaire to be presented with a Pinterest Board tailored to your needs. "Chase Dream Boards is the first-of-its-kind experience that marries design inspiration with practical finan- cial guidance. Now customers with the desire to begin a home renovation project can get per- sonalized, expert help delivered via Pinterest in a highly visual and digestible format," said Amy Bonitatibus, Chief Marketing and Communications Officer for Chase Home Lending. READ THIS: GENERATION PRICED OUT: WHO GETS TO LIVE IN THE NEW URBAN AMERICA By Randy Shaw It's no secret that housing afford- ability impedes many consumers looking to break into the hous- ing market. In his new book, Generation Priced Out, Randy Shaw takes a closer look at how housing affordability is impact- ing consumers across generation, racial, and socioeconomic lines. Adding credence to his writ- ing, Shaw is the Director of the Tenderloin Housing Clinic, a San Francisco provider of housing for homeless single adults. "Working people across America increas- ingly spend hours commuting to jobs in cities where they can no longer afford to live. Shaw shows how people are mobiliz- ing to reverse this trend and describes how urban areas can and must stop the pricing out of the working and middle class," said reviewer Deepak Bhargava, President for the Center for Community Change. WATCH THIS: REAL ESTATE RISING RISKS CNBC SERIES CNBC.com/Rising-Risks As the housing damage due to climate change continues to rise, this insightful CNBC video se- ries is timely, topical, and offers a peek into what the future holds. From reporting on new technol- ogy that is mitigating flood risks to studying where home values are fluctuating due to storms, catch up on how natural disasters have been playing into market conditions here. TWEET THIS: @NATLHSINGTRUST Launched in 1988, the National Housing Trust is a national nonprofit that strives toward housing preservation through public policy advocacy, real estate development, and lend- ing. Follow them on Twitter @ NatlHsingTrust to learn how you can contribute to their campaign for affordable housing, follow key housing legislation, or hear stories from the citizens the National Housing Trust aims to help.

• Cover